Where are contactless payments used the most and are they secure?

How many times have you made a contactless payment today? Contactless cards – a quick and simple way to pay for items of £30 and under – have radically changed the way we spend money, with a quarter of all card transactions now made via contactless.

According to the UK Cards Association (UKCA), overall contactless payments came to a total of £25 billion of spending in 2016, up from £7.75 billion in 2015. There are now 104.4m contactless cards in the UK, a 25% increase year on year.

So let’s delve deeper into the pros and cons of contactless payments, how they work and where they are used the most.

How do contactless cards work?

You simply pay for your goods or service by touching your debit or credit card on the terminal, which reads your card, up to a limit of £30 for each transaction. The UKCA’s January 2017 figures showed that the average contactless transaction is now £9.08.

There’s no need for a PIN or a signature, and it’s all over in seconds. Most contactless payments will appear on your bank statement within a few days.

It is worth remembering there are other forms of contactless payments too, using your smartphone or tablet, or even your watch. You can use the Android Pay and Apple Pay mobile apps in most shops and on London’s transport system. Android Pay in theory has no limit but most retailers are likely to stick to the £30 limit.

Where are contactless payments used most?

March 2017 figures from the Barclaycard Contactless Spending Index found that in London, six out of every 10 transactions up to £30 in the past year were contactless, the highest in the country.

The biggest annual rises came in Scotland, with the Orkneys (281%), the Shetlands, Dumfries and Kilmarnock filling the top four spots.

Belfast was the highest-moving large city at 201% growth year-on-year, while the English town with the highest increase in usage was Blackburn (179%), followed by Sunderland (168%) and Doncaster (165%).

In terms of where people used contactless payments, in 2015 almost half of all contactless transactions were in supermarkets and restaurants, followed by commuting and fast food. March 2017 figures showed a huge rise in contactless payments in other sectors too besides these, the top 5 being:

Service stations (218%)

Department stores (147%)

Discount stores (120%)

Supermarkets (114%)

Hotels and motels (100%)

What are the advantages of contactless payments?

Speed - Probably the most obvious one, with average transaction time seven seconds quicker than using Chip and PIN.

More secure - As you don’t have to enter a PIN, it protects you from onlookers seeing what you’re typing in.

No searching - Even if you are just buying a chocolate bar, there is no need to search your purse for cash.

Commuting convenience - You can also use it for ‘pay as you go’ on Transport for London.

Is contactless safe?

The cards have several layers of security to protect against fraudulent use. You can’t accidentally pay twice, and your card needs to be right by the reader.

However, thieves have been known to use simple machines to ‘read’ your card while you’re in a queue or even walking, by standing right beside you. There have also been cases of lost or stolen cards being used and not discovered for some time.

To help protect against this, from time to time you’ll be asked to enter your PIN to verify your identity, and card readers cannot access the security code, the bank details, or any of the other material essential to make online purchases.

Bear in mind also that contactless fraud makes up less than 1% of all criminal card activity, and the UK Cards Association states that “if you are a victim of card fraud you will get your money back from your bank and will never be left out of pocket.”.

Some tips to stay safe with contactless:

Don’t hand your card to a server, or let it go out of sight

Be aware of your surroundings and who is standing close to you

Check your bank account for any unfamiliar transactions - you may not always notice at first as they are likely to be small numbers

Get a special wallet that can cover the cards and block out such machinery

If your card is lost or stolen, report it to your bank as soon as possible to protect yourself from fraudulent use.

How to get a contactless card

Most debit cards, and all credit cards, now have contactless technology though there are some restrictions - you have to be 18 or over, there is usually some kind of overdraft control, and some ‘starter’ accounts may not include them. Current, ‘reward’ or student bank accounts should though.